q1’20 earnings presentation · 2020-06-05 · santander us includes a northeast us regional bank,...

28 April 2020

Q1’20

Earnings Presentation

US

2

Important InformationNon-IFRS and alternative performance measures

In addition to the financial information prepared in accordance with International Financial Reporting Standards (“IFRS”) and derived from our financial statements, this presentation contains certain financialmeasures that constitute alternative performance measures (“APMs”) as defined in the Guidelines on Alternative Performance Measures issued by the European Securities and Markets Authority (ESMA) on 5October 2015 (ESMA/2015/1415en) and other non-IFRS measures (“Non-IFRS Measures”). The financial measures contained in this presentation that qualify as APMs and non-IFRS measures have beencalculated using the financial information from Santander Group but are not defined or detailed in the applicable financial reporting framework and have neither been audited nor reviewed by our auditors. Weuse these APMs and non-IFRS measures when planning, monitoring and evaluating our performance. We consider these APMs and non-IFRS measures to be useful metrics for management and investors tofacilitate operating performance comparisons from period to period. While we believe that these APMs and non-IFRS measures are useful in evaluating our business, this information should be considered assupplemental in nature and is not meant as a substitute of IFRS measures. In addition, other companies, including companies in our industry, may calculate or use such measures differently, which reduces theirusefulness as comparative measures. For further details of the APMs and Non-IFRS Measures used, including its definition or a reconciliation between any applicable management indicators and the financialdata presented in the consolidated financial statements prepared under IFRS, please see the 2019 Annual Financial Report, filed with the Comisión Nacional del Mercado de Valores of Spain (CNMV) on 28February 2020, as well as the section “Alternative performance measures” of the annex to the Banco Santander, S.A. (“Santander”) 2020 1Q Financial Report, published as Relevant Fact on 28 April 2020. Thesedocuments are available on Santander’s website (www.santander.com).

The businesses included in each of our geographic segments and the accounting principles under which their results are presented here may differ from the included businesses and local applicable accountingprinciples of our public subsidiaries in such geographies. Accordingly, the results of operations and trends shown for our geographic segments may differ materially from those of such subsidiaries

Forward-looking statements

Santander cautions that this presentation contains statements that constitute “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-lookingstatements may be identified by words such as “expect”, “project”, “anticipate”, “should”, “intend”, “probability”, “risk”, “VaR”, “RoRAC”, “RoRWA”, “TNAV”, “target”, “goal”, “objective”, “estimate”, “future” andsimilar expressions. These forward-looking statements are found in various places throughout this presentation and include, without limitation, statements concerning our future business development andeconomic performance and our shareholder remuneration policy. While these forward-looking statements represent our judgment and future expectations concerning the development of our business, a numberof risks, uncertainties and other important factors could cause actual developments and results to differ materially from our expectations. The following important factors, in addition to those discussedelsewhere in this presentation, could affect our future results and could cause outcomes to differ materially from those anticipated in any forward-looking statement: (1) general economic or industry conditionsin areas in which we have significant business activities or investments, including a worsening of the economic environment, increasing in the volatility of the capital markets, inflation or deflation, and changes indemographics, consumer spending, investment or saving habits; (2) exposure to various types of market risks, principally including interest rate risk, foreign exchange rate risk, equity price risk and risksassociated with the replacement of benchmark indices; (3) potential losses associated with prepayment of our loan and investment portfolio, declines in the value of collateral securing our loan portfolio, andcounterparty risk; (4) political stability in Spain, the UK, other European countries, Latin America and the US (5) changes in laws, regulations or taxes, including changes in regulatory capital and liquidityrequirements, including as a result of the UK exiting the European Union and increased regulation in light of the global financial crisis; (6) our ability to integrate successfully our acquisitions and the challengesinherent in diverting management’s focus and resources from other strategic opportunities and from operational matters while we integrate these acquisitions; and (7) changes in our ability to access liquidityand funding on acceptable terms, including as a result of changes in our credit spreads or a downgrade in our credit ratings or those of our more significant subsidiaries. Numerous factors could affect the futureresults of Santander and could result in those results deviating materially from those anticipated in the forward-looking statements. Other unknown or unpredictable factors could cause actual results to differmaterially from those in the forward-looking statements.

http://www.santander.com/

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Important Information

Forward-looking statements speak only as of the date of this presentation and are based on the knowledge, information available and views taken on such date; such knowledge, information and views maychange at any time. Santander does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

No offer

The information contained in this presentation is subject to, and must be read in conjunction with, all other publicly available information, including, where relevant any fuller disclosure document published bySantander and its affiliates. Any person at any time acquiring securities must do so only on the basis of such person’s own judgment as to the merits or the suitability of the securities for its purpose and only onsuch information as is contained in such public information having taken all such professional or other advice as it considers necessary or appropriate in the circumstances and not in reliance on the informationcontained in this presentation. No investment activity should be undertaken on the basis of the information contained in this presentation. In making this presentation available Santander and Santander UKGroup Holdings. give no advice and makes no recommendation to buy, sell or otherwise deal in shares in Santander or in any other securities or investments whatsoever.

Neither this presentation nor any of the information contained therein constitutes an offer to sell or the solicitation of an offer to buy any securities. No offering of securities shall be made in the United Statesexcept pursuant to registration under the U.S. Securities Act of 1933, as amended, or an exemption therefrom. Nothing contained in this presentation is intended to constitute an invitation or inducement toengage in investment activity for the purposes of the prohibition on financial promotion in the U.K. Financial Services and Markets Act 2000.

Historical performance is not indicative of future results

Statements as to historical performance or financial accretion are not intended to mean that future performance, share price or future earnings (including earnings per share) for any period will necessarily matchor exceed those of any prior period. Nothing in this presentation should be construed as a profit forecast.

Third Party Information

In particular, regarding the data provided by third parties, neither Santander, nor any of its administrators, directors or employees, either explicitly or implicitly, guarantees that these contents are exact, accurate,comprehensive or complete, nor are they obliged to keep them updated, nor to correct them in the case that any deficiency, error or omission were to be detected. Moreover, in reproducing these contents in by any means, Santander may introduce any changes it deems suitable, may omit partially or completely any of the elements of this presentation, and in case of any deviation between such a version and this one, Santander assumes no liability for any discrepancy.

The information included in this presentation for Santander Holdings USA, Inc. (“SHUSA”) has been prepared according to Spanish accounting criteria and regulation in a manner applicable to all subsidiaries of theSantander Group and, as a result, it may differ from the information disclosed locally by SHUSA or Santander Bank. Any use of local (US GAAP) accounting will be noted where it occurs.

IRS Circular 230 Disclosure: Santander and its employees are not in the business of providing, and do not provide, tax or legal advice to any taxpayer outside Santander. Any statements in this communication as totax matters were not intended or written to be used, and cannot be used or relied upon, by any taxpayer for the purpose of avoiding tax penalties. Any taxpayer should seek advice based on the taxpayer'sparticular circumstances from an independent tax advisor.

4

Data shown throughout this presentation reflects information regarding Santander

Holdings USA, Inc. which includes Santander Bank N.A. (SBNA), Santander

Consumer USA Holdings Inc. (SC), Santander Investment Securities (SIS), Banco

Santander International (BSI Miami), Puerto Rico1 (Santander Bancorp and

Santander Financial Services), and Santander’s NY Branch unless stated otherwise.

1. On 21 October 2019, it was announced that Grupo Santander has agreed to sell its retail and commercial banking franchise in Puerto Rico to FirstBank Puerto Rico for approximately USD 1.1 billion. The sale includes Santander’s 27 bank branches in Puerto Rico and total assets of USD 6.2 billion. The transaction is expected to close in the middle of 2020, subject to regulatory approvals.

Perimeter

5

5

Appendix

41Financial system

2Strategy and business

3

Index

Concluding remarks

Results

6

Financial System: Loan and Deposit Growth

Source: FDIC Statistics on Depository Institutions; data available one quarter in arrears. 1. Gross Loans. 2. Annualized large banks ending QoQ growth rate based on Federal Reserve data.

Industry loan growth driven by commercial balances

Total Loans (USD bn)1

YoY(%)

Total Deposits (USD bn)

C&I Loan growth expected to accelerate in Q1’20, while Consumer loans projected to decline sharply

Deposit growth projected to accelerate further in Q1’20

YoY(%)

10,155 10,150 10,302 10,401 10,521

Dec-18 Mar-19 Jun-19 Sep-19 Dec-19

4.4% 4.1% 4.5% 4.6% 3.6%

13,866 13,926 14,040 14,276 14,535

Dec-18 Mar-19 Jun-19 Sep-19 Dec-19

3.5% 2.9% 4.2% 5.2% 4.8%

Quarter over Quarter

Growth % 2M'19 J'19 S'19 D'19

M'20

(est.)

Total Loans 0.0% 8.4% 1.6% 7.2% 19.6%

C&I 4.0% 1.2% (1.2%) (2.4%) 72.4%

Real Estate (0.4%) 2.8% 2.8% 2.8% (1.2%)

Resi Mortgages (0.4%) 6.4% 3.6% 5.2% (3.6%)

CRE 2.4% 0.4% 6.0% 3.2% 5.2%

Home Equity (8.0%) (10.8%) (11.6%) (14.8%) (8.8%)

Consumer 1.6% 22.4% 6.8% 17.6% (14.0%)

Deposits -0.4% 2.4% 5.2% 11.6% 35.2%

Loan to Deposit Ratio 70.6% 71.7% 71.0% 70.2% 67.8%

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5

Appendix

41Financial system


3

Index

Concluding remarks

Results

8

Strategy and business

STRATEGIC PRIORITIES

Focus on meeting regulatory expectations

Improve customer experience and loyalty across segments

Improve margins through focus on integration of U.S. operations

Optimize funding and capital to improve results

Santander US includes a Northeast US regional bank, a nationwide auto finance business, an international private banking operation and a broker-dealer

KEY DATA Q1’20 YoY Var.

Santander US Business and Results

Customer loans1 USD 110.8 bn

Customer funds2 USD 90.0 bn

Underlying att. profit USD 301 mn

Santander Bank - Network & Customers

Total customers3 2.3 mn

Branches 586

ATMs 2,225

Santander Bank - Market Shares

Loans 4 3.2% +34 bps

Deposits 4 2.6% -1 bp

Santander Consumer USA - Market Shares

Retail Auto Lending 5 4.2% (#7 in the US)

-1.8%

-2.8%

-6.4%

+46.1%

+12.4%

+17.9%

Manage the COVID-19 crisis to support customers, employees and communities

1. IFRS. Excluding reverse repos.2. IFRS. Excluding repos3. SBNA clients includes Puerto Rico.4. Market share as of 30/06/2019 from FDIC. Data available once a year (Considering all states where Santander Bank operates).5. Source: J.D. Power Market Share Report for Q4’19 (includes Santander Consumer USA and Chrysler Capital combined).

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Santander US: Bank & Consumer Focus


NOTE: Calculated using Local US GAAP and Treasury accounting criteria.1. Core excludes Time Deposits, Brokered CDs, Government and Holding Company deposits.2. Owned and Serviced portfolio excludes Personal Lending.3. Includes Chrysler Capital originated retail loans and leases. Excludes Bluestem.4. IFRS

4.0 3.9 4.1 3.8 3.8

1.0 1.9 2.1 1.9 1.12.0

2.5 2.21.8 2.0

7.08.4 8.4

7.5 6.9

Mar-19 Jun-19 Sep-19 Dec-19 Mar-20

SC Loans SBNA Loans Leases

45.7 47.1 47.9 49.7 49.8

8.7 9.3 10.0 10.4 10.354.5 56.4 57.9 60.1 60.1


Owned Assets Serviced for Others

26.6 27.2 26.7 26.1 26.6


43.7 43.8 45.4 46.4 49.0

5.1 6.9 6.9 7.2 9.0


Core Deposits Borrowings

Online Digital Customers (000’s)

Funding Mix

(USD bn)1

Commercial Loan Portfolio

(USD bn)

Balance Sheet Efficiency2

Originate loans and leases with

appropriate risk-return profile3

Disciplined Expense

Management4

SBNA

925 964

Mar-19 Mar-20

213.6 228.3 242.4 243.0 228.5


SC

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Driving innovation, creating efficiencies and attracting customers

IT MEXUS

Puerto Rico sale to FirstBank

Santander has agreed to sell its retail and commercial banking franchise in Puerto Rico, Santander Bancorp (the holding company that includes Banco Santander Puerto Rico), to FirstBank Puerto Rico, for a

total consideration of approximately $1.1 billion (€1 billion). Anticipated closing will be Q2 2020 with the anticipated conversion happening in Q3 2020.

Digital collaboration with Group

SBNA will open a de novo Branch in Miami and partner with Banco Santander International (BSI) to capture both local Miami business and referral business that BSI cannot currently capture. An improved value proposition will also be delivered. BSI is also evaluating opportunity to capture additional ~$17Bn in client assets in Brazil.

BSI Miami currently estimates approximately $250 – 300MMin total AuM leaves BSI annually due to clients that can no longer be served by BSI.

BSI customer growth

The MEXUS efficiency program is underway with a focus on simplifying the SanMX and SanTec Technology operating model and simplifying supporting functions across the North America region. Efficiencies are being achieved according to plan. Santander Mexico & Santander Global Technology uplift is also underway.

Collaboration between Santander Digital Group and SBNA will deliver best-in-class products, services, and customer experiences.

Highlights include leveraging Santander Digital Asset’s (SDA) Globileteam to build a new digital onboarding solution for money market account opening (planned), launching new mortgage digital application platform with Roostify (planned) and enabling same day cross border money-movement from US to Mexico (completed).

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We continue doing business in a more responsible and sustainable way …

Sustainability

Financial inclusionCommunities

Culture

75 kpeople financially empowered in 2019

USD 1.29 mn (489)scholarships granted

184 kpeople helped through our community programs in 2019

USD 328 mninvested in affordable housing projects in 2019

USD 3.9bnAcross ~55 transactions in wind and solar powered energy projects as of 12/31/2019

Engagement

76% of employees

proud to work for Santander(+4pp vs 2018)

4.7 GWOf renewable projects financed in 2019 by the Project Finance team

Women

21% Senior leadership

(+2pp vs. 2018)

12


… whilst assisting our customers and employees during the COVID-19 crisis

USD 25 million in Loans

EmployeesRetail Banking

Santander Consumer USA

• Expanding payment deferrals

• Waiving late charges

• Extensions for lessees unable to return their vehicles

To Community Development Financial Institutions

(CDFIs) to support small business lending

• Temporary payment suspension

• Refunding certain fees

• Suspension of mortgage and HELOC foreclosures

• Additional 80 hours of paid leave to employees if they

are unable to work for health reasons

• Premium pay of USD 250 per week for branch and other

frontline workers who are unable to work from home

13

YoY Loan growth driven by strong originations at SC and large corporate customers at New York Branch


Total customer loans (USD bn)1

Group criteria.1. Excludes reverse repos.2. Includes Private Banking.3. Personal loans, securities lending, credit cards, R/V & Marine, equipment loans and HELOC.4. Puerto Rico, BSI, SIS-NY (Santander Investment Securities) and Holdco.

59 60 60 61 59

30 31 31 33 32

10 11 11 14 19 98.6 102.0 103.2

107.6 110.8


Mar-20 Mar-19 YoY (%) QoQ (%)

Individuals2 25.5 23.7 7.9 -1.9

o/w Mortgages 13.0 14.9 -13.0 -3.4

o/w Consumer credit3 7.6 3.5 119.6 2.7

Consumer Finance 32.6 30.6 6.5 -0.3

SMEs 7.7 8.2 -5.7 -2.3

Corporates 23.3 22.4 3.9 3.9

CIB 19.6 11.4 71.4 20.3

Other 2.2 2.4 -8.8 -5.5

Total customer loans 110.8 98.6 12.4 3.0

SBNA 58.9 58.5 0.6 -4.2

SC USA 32.5 30.5 6.6 -0.4

Other entities4 19.5 9.6 102.9 44.0

Total customer loans 110.8 98.6 12.4 3.0SBNA SC USA Other Entities4

14


Total customer funds (USD bn)

Group criteria.1. Puerto Rico, BSI, SIS-NY (Santander Investment Securities) and Holdco

YoY Deposit growth driven by wholesale and commercial money market deposits at SBNA; Cash Management business at New York Branch


Demand 64.4 54.7 17.7 8.3

Time 15.5 11.4 35.4 42.5

Total deposits 79.9 66.1 20.7 13.5

Mutual Funds 10.2 10.2 -0.6 -9.5

Total customer funds 90.0 76.4 17.9 10.4

SBNA 58.5 54.4 7.6 0.5

Other entities1 31.5 22.0 43.3 35.0

Total customer funds 90.0 76.4 17.9 10.4

54 54 57 58 59

22 25 23 23 31

76.4 79.6 80.1 81.690.0


SBNA Other Entities1

15


Santander US funding increased YoY driven by higher wholesale borrowings at SBNA and funding at SC

NOTE: Calculated using local US GAAP criteria and Treasury accounting criteria


HoldCo Debt 9.4 8.4 13.1 (5.1)

SBNA

FHLB 8.8 4.9 80.5 25.7

LTD Debt 0.1 0.2 (50.0) (20.0)

SBNA Total 8.9 5.1 75.4 24.9

SC

Utilized Third Party Funding 6.2 4.9 26.5 24.0

Amortizing Notes 8.5 7.6 11.8 10.4

Public Securitizations 20.7 19.7 5.1 1.0

SC Total 35.4 32.2 9.9 6.6

Total SHUSA Funding 53.8 45.7 17.8 6.95.1 6.9 6.9 7.2 8.9

32.232.8 32.5 33.2

35.4

8.49.2 9.9 9.9

9.445.7

48.9 49.2 50.353.8


SBNA SC Holdco

Total funding (USD bn)

16

5

Appendix

41Financial system


3

Index

Concluding remarks

Results

17

NII relatively steady as higher loan volumes and lower costs continue to offset the declining rates on loans through Q1

Results

Net interest income (USD mn) Yields / costs - SBNA (%)

564 573 561 552 539

972 980 977 971 989

61 79 85 81 85

1,598 1,633 1,623 1,604 1,612

Q1'19 Q2'19 Q3'19 Q4'19 Q1'20

NOTE: NIM is calculated as Net Interest Income / Total Average Assets. Leasing income is not included as it is recorded in other operating income and expenses.1. Other Entities includes Holdco, Puerto Rico, BSI Miami, NY (Branch+SIS). 2. Average Quarterly Rate.

4.63% 4.62% 4.53% 4.26% 4.24%

0.86% 0.90% 0.92% 0.83% 0.73%

Q1'19 Q2'19 Q3'19 Q4'19 Q1'20

Yields / costs – SC USA (%)

17.30% 16.95% 16.64% 16.24% 16.07%

3.80% 3.60% 3.60% 3.50% 3.30%

Q1'19 Q2'19 Q3'19 Q4'19 Q1'20

SBNA SC USA Other Entities1

NIM - Total US

3.99% 4.02% 3.97% 3.83% 3.63%

NIM - SBNA

2.94% 2.90% 2.75% 2.62% 2.56%

NIM - SC USA

8.71% 8.54% 8.27% 8.08% 7.99%

Federal Funds rate2

2.47% 2.50% 2.30% 1.83% 1.41%

Yield on loans Cost of deposits

Yield on loans Cost of debt

18

YoY net fee income increase due to higher income on SIS products, and increased transaction activity at BSI

Results

Net fee income (USD mn)

98 104 80 96 87

87 83

83 75 84

80 87 101 84

104

266 275 264

255 275

Q1'19 Q2'19 Q3'19 Q4'19 Q1'20

Q1'20 Q1'19 YoY (%) QoQ (%)

Transactional fees 173 163 6.2 2.6

Payment methods 77 79 -1.4 -0.1

Contingent commitments 31 24 30.6 5.3

Account admin. and

maintenance36 35 3.7 20.2

Other transactional 28 26 10.0 -10.2

Investment and pension

funds9 8 5.2 0.4

Insurance 10 11 -16.4 -8.2

Securitites and custody

services42 29 47.8 87.5

Other 41 54 -24.1 -6.0

Total net fee income 275 266 3.5 8.1

SBNA 87 98 -11.4 -8.8

SC USA 84 87 -4.1 11.7

Other entities1 104 80 29.8 24.1

Total net fee income 275 266 3.5 8.1


NOTE: YoY fees at SBNA & Holdco impacted by employee transfer (`USD 3.6MM per month impact)1. Puerto Rico, BSI, NY (Branch+SIS) and Holdco

19

Results

Total income (USD mn)

Gross Income higher YoY driven by higher loan & lease volumes, trading gains at NY, transaction activity at BSI and lower 2019 FDIC charge at SBNA

630 681 700 664 628

1,269 1,291 1,313 1,262 1,280

161 186 185

171 219

2,061 2,158 2,198

2,096 2,126

Q1'19 Q2'19 Q3'19 Q4'19 Q1'20


NOTE: YoY fees at SBNA & Holdco impacted by employee transfer (`$3.6MM per month impact).1. Puerto Rico, BSI, NY (Branch+SIS) and Holdco.2. Gains (losses) on financial transactions and Leasing Income.

Q1'20 Q1'19 YoY (%) QoQ (%)

Net interest income 1,612 1,598 0.9 0.5

Net fee income 275 266 3.5 8.1

Customer revenue 1,887 1,864 1.3 1.6

Other2 239 197 21.3 0.4

Total income 2,126 2,061 3.2 1.4

SBNA 628 630 -0.3 -5.4

SC USA 1,280 1,269 0.8 1.4

Other entities1 219 161 35.4 28.2

Total income 2,126 2,061 3.2 1.4

20

Expenses lower QoQ driven mainly by lower personnel, marketing, technology, and consulting costs at SBNA

Results

Operating expenses (USD mn)

NOTE: YoY expenses at SBNA & Holdco impacted by employee transfer (`USD 3.3 mn per month impact)1. Puerto Rico, BSI, NY (Branch+SIS) and Holdco.

489 508 528 543 487

214 228 242 243 228

178 168

171 176 176

881 905 942 963

892

Q1'19 Q2'19 Q3'19 Q4'19 Q1'20


Q1'20 Q1'19 YoY (%) QoQ (%)

SBNA 487 489 -0.4 -10.4

SC USA 228 214 7.0 -6.0

Other entities1 176 178 -1.1 0.1

Operating Expenses 892 881 1.3 -7.4

Efficiency ratio - Total US 41.9% 42.7% -80 bps

- SBNA 77.5% 77.6% -4 bps

- SC USA 17.9% 16.8% 102 bps

Branches (#) 619 659 -6.1 -0.3

Employees (#) 17,277 17,279 0.0 -0.5

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Results

Net LLPs (USD mn)

1. Holdco, Puerto Rico, BSI Miami, NY (Branch+SIS).2. Cost of credit based on 12 month loan-loss provisions divided by average customer loans.

LLPs increased YoY well below loan growth, with improvement in asset quality. QoQ provisions lower due to seasonal variations at SC

54 56 66 32 74

638 576

812 900

635

2 5

-2 -13

3 694

637

876 918

712

Q1'19 Q2'19 Q3'19 Q4'19 Q1'20


Q1'20 Q1'19 YoY (%) QoQ (%)

Net operating income 1,235 1,180 4.6 8.9

Loan-loss provisions (712) (694) 2.6 -22.5

Net operating income after

provisions523 486 7.4 142.6

SBNA (74) (54) 36.7 131.1

SC USA (635) (638) -0.4 -29.5

Other entities1 (3) (2) 53.7 -

Total LLPs (712) (694) 2.6 -22.5

NPL ratio - Total US 2.00% 2.41% -41 bps -20 bps

- SBNA 0.62% 0.91% -29 bps -7 bps

- SC USA 5.67% 6.17% -50 bps -49 bps

Cost of credit2 - Total US 2.81% 3.11% -30 bps -4 bps

- SBNA 0.38% 0.24% 14 bps 3 bps

- SC USA 9.25% 9.79% -54 bps -17 bps

Coverage Ratio - Total US 167% 161% 5.8 pp 5.0 pp

- SBNA 161% 118% 43.4 pp 20.7 pp

- SC USA 184% 184% -0.8 pp 8.5 pp

22

Results

Underlying Attributable Profit (USD mn)

Underlying profit up YoY driven mainly by higher loan and lease volumes, lower claims volume at Santander Securities and revenue growth at NY

Q1'20 Q1'19 YoY (%) QoQ (%)

PBT 516 420 22.7 199.4

Tax on profit (136) (125) 8.7 151.7

Consolidated profit 379 295 28.7 -

Minority interests (78) (89) -11.8 -

Underlying attributable

profit301 206 46.1 180.9

SBNA 57 68 -16.1 18.2

SC USA 236 210 12.3 -

Holdco1 (76) (75) 2.0 38.5

Other entities2 84 3 - 33.1

Total LLPs 301 206 46.1 180.9

Effective tax rate 26.4% 29.9% -3.4 pp -5.0 pp

68 79 72 48 57

210 266

120

50

236

-75 -79 -82 -55 -76

3

54

61

63

84 206

319

170

107

301

Q1'19 Q2'19 Q3'19 Q4'19 Q1'20

SBNA SC USA HoldCo Other Entities2

1. Includes Services & Promotions.2. Puerto Rico, BSI Miami, NY (Branch+SIS).

23

5

Appendix

41Financial system


3

Index

Concluding remarks

Results

24

Concluding remarks

Conclusions

Financial System

Strategy &

Business

Results

Unemployment rate continues to decline while used car values level off

Industry loan growth driven by commercial balances

Focus on meeting regulatory expectations

Improvement of our customer experience and loyalty across segments

Improve margins through focus on integration of US operations

Optimize funding and capital to improve results

Manage the COVID-19 Crisis to support customers, employees and communities

Gross Income higher YoY driven by higher loan & lease volumes, trading gains at NY, transaction activity at BSI, and 2019 FDIC charge at SBNA

Expenses lower QoQ driven mainly by lower personnel, marketing, technology, and consulting costs at SBNA

LLPs increased YoY well below loan growth, with improvement in asset quality. QoQ provisions lower due to seasonal variations at SC

Underlying profit up YoY driven mainly by higher loan and lease volumes, lower claims volume at Santander Securities, and revenue growth at NY

25

5

Appendix

41Financial system


3

Index

Concluding remarks

Results

26

Balance sheet – Santander US

Appendix

USD million Variation

Mar-20 Mar-19 Amount %

Loans and advances to customers 114,917 102,602 12,314 12.0

Cash, central banks and credit institutions 21,655 20,298 1,357 6.7

Debt instruments 17,485 15,092 2,393 15.9

Other financial assets 7,942 3,984 3,958 99.3

Other asset accounts 21,799 19,044 2,754 14.5

Total assets 183,797 161,021 22,776 14.1

Customer deposits 91,708 72,858 18,850 25.9

Central banks and credit institutions 19,962 14,658 5,305 36.2

Marketable debt securities 39,536 45,876 (6,340) (13.8)

Other financial liabilities 8,110 4,094 4,016 98.1

Other liabilities accounts 4,661 4,144 517 12.5

Total liabilities 163,977 141,629 22,348 15.8

Total equity 19,820 19,392 429 2.2

Other managed customer funds 19,239 19,659 (420) (2.1)

Mutual funds 10,158 10,218 (60) (0.6)

Pension funds — — — —

Managed portfolios 9,081 9,441 (360) (3.8)

27

Balance sheet – Santander Bank N.A.

Appendix



Loans and advances to customers 58,340 57,949 391 0.7

Cash, central banks and credit institutions 9,073 4,629 4,443 96.0

Debt instruments 14,020 12,527 1,493 11.9

Other financial assets 2,226 1,114 1,111 99.8

Other asset accounts 2,541 2,100 441 21.0

Total assets 86,200 78,319 7,881 10.1

Customer deposits 58,944 54,579 4,365 8.0


Marketable debt securities 133 153 (20) (13.1)

Other financial liabilities 1,753 872 881 101.0

Other liabilities accounts 834 776 58 7.5


Total equity 10,883 10,380 502 4.8

Other managed customer funds 0 0 0 1.7

Mutual funds 0 0 0 1.7


Managed portfolios — — — —

28

Balance sheet – Santander Consumer US

Appendix



Loans and advances to customers 29,112 27,014 2,098 7.8

Cash, central banks and credit institutions 2,393 2,484 (91) (3.7)

Debt instruments — — — —

Other financial assets 2 143 (141) (98.4)

Other asset accounts 18,093 15,606 2,488 15.9

Total assets 49,601 45,247 4,354 9.6

Customer deposits 2 3 (1) (34.0)


Marketable debt securities 28,072 27,114 958 3.5

Other financial liabilities 165 374 (208) (55.8)

Other liabilities accounts 2,268 1,837 432 23.5


Total equity 7,051 7,323 (272) (3.7)

Other managed customer funds — — — —

Mutual funds — — — —


Managed portfolios — — — —

29

Income statement – Santander US

Appendix

USD million

Q1'19 Q2'19 Q3'19 Q4'19 Q1'20

Net interest income 1,598 1,633 1,623 1,604 1,612

Net fee income 266 275 264 255 275

Gains (losses) on financial transactions 18 26 65 37 51

Other operating income 179 224 245 201 188

Total income 2,061 2,158 2,198 2,096 2,126Operating expenses (881) (905) (942) (963) (892)

Net operating income 1,180 1,253 1,256 1,134 1,235Net loan-loss provisions (694) (637) (876) (918) (712)

Other gains (losses) and provisions (66) (29) (85) (43) (7)

Underlying profit before tax 420 586 295 172 516Tax on profit (125) (155) (79) (54) (136)

Underlying profit from continuing operations 295 431 216 118 379Net profit from discontinued operations — — — — —

Underlying consolidated profit 295 431 216 118 379Non-controlling interests (89) (112) (46) (11) (78)

Underlying attributable profit to the parent 206 319 170 107 301

30

Income statement – Santander Bank N.A.

Appendix

USD million

Q1'19 Q2'19 Q3'19 Q4'19 Q1'20

Net interest income 564 573 561 552 539

Net fee income 98 104 80 96 87

Gains (losses) on financial transactions 4 15 47 26 5

Other operating income (37) (11) 11 (9) (2)

Total income 630 681 700 664 628Operating expenses (489) (508) (528) (543) (487)

Net operating income 141 173 171 121 141Net loan-loss provisions (54) (56) (66) (32) (74)

Other gains (losses) and provisions (6) (20) (32) (23) (3)



Underlying consolidated profit 68 79 72 48 57Non-controlling interests — — — — —


31

Income statement – Santander Consumer US

Appendix

USD million

Q1'19 Q2'19 Q3'19 Q4'19 Q1'20

Net interest income 972 980 977 971 989

Net fee income 87 83 83 75 84

Gains (losses) on financial transactions 0 (5) 5 1 10

Other operating income 209 232 248 214 197

Total income 1,269 1,291 1,313 1,262 1,280Operating expenses (214) (228) (242) (243) (228)

Net operating income 1,056 1,063 1,070 1,019 1,051Net loan-loss provisions (638) (576) (812) (900) (635)

Other gains (losses) and provisions (14) 5 (33) (15) (2)



Underlying consolidated profit 299 377 165 61 314Non-controlling interests (89) (112) (46) (11) (78)


Thank you.

Our purpose is to help people and business prosper.

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q1’20 earnings presentation · 2020-06-05 · santander us includes a northeast us regional bank,...

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